Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Washington Post – The Bush administration’s decision to drop proposed money-laundering rules for hedge funds is "inexplicable, ill-timed and unwise," Sen. Carl M. Levin (D-Mich.) said yesterday.
Hedge funds, private investment pools whose investors are often wealthy individuals, have drawn increased scrutiny during the financial crisis. But even before the market troubles, some legislators worried that the largely unregulated funds could serve as a vehicle for money laundering, perhaps for tax evaders or terrorists.
"Hedge funds are unregulated financial companies that can handle millions of dollars in offshore money without any legal obligation to check who is behind the funds or report suspicious activities," Levin said in a statement. "But instead of plugging the hedge fund regulatory gap by issuing a final rule, the Administration went the opposite way, withdrew its anti-money laundering proposal, and offered nothing in its place."
Washington Post – Seven years ago the Patriot Act required every financial institution to establish a program to combat money-laundering.
But the roughly $2 trillion hedge-fund industry today remains free of any such government restrictions, and this week the Treasury Department formally withdrew its once proposed rules.
"Hedge funds do represent some risk because their operations and the identity of investors are generally not very transparent," said Steve Hudak, a spokesman for the Financial Crimes Enforcement Network of the Treasury Department. But "that risk needs to be studied and carefully assessed prior to implementing any anti-money-laundering regulations."
Hedge funds, which are largely unregulated investment pools whose investors are often wealthy individuals or sophisticated financial firms, have drawn increased scrutiny during the financial crisis.
International Herald Tribune – As world markets shudder, the hedge funds based in London, once the toast of the city’s flashy financial elite and magnets for cosmopolitan capital, have stumbled badly.
The increasingly global sweep of the credit crunch and the collapse of Lehman Brothers have punished all manner of hedge funds – secretive investment pools that rely on generous lenders and a high tolerance for risk to thrive.
But in London, where a number have already shuttered, the hedge fund retreat has a pointed resonance. Along with celebrity chefs, Russian oligarchs and Italian soccer coaches, hedge funds that established operations here in the past decade have been seen as a mark of London’s hip new spirit of decadent cool – a notion reinforced by the pound’s long period of strength and the boom in home prices.
Now, the failure of Lehman Brothers, which had deep financial relationships with some of the largest hedge funds in the world, has unsettled an already jittery market – sparking fears that some hedge fund assets might be frozen there and thus be unavailable for sale if investors choose to redeem them.
Globe and Mail – Hedge-fund manager Ben Shoval, wearing a green Thomas Pink shirt and a $1,600 Giorgio Armani suit, grabbed the microphone last week at New York’s Broadway Comedy Club to riff on his day job.
The 31-year-old hedge fund manager started his stand-up career in January, taking as many as a dozen private and group lessons a month that have cost about $3,500, he says. By humbling himself before small groups at open-mike shows, Mr. Shoval said he hopes he’ll learn to perform at conferences and charity events.
Hedge fund managers may need comic relief. The industry is composed of unregulated investment pools that typically charge 2 per cent in fees and reap 20 per cent of profits. Hedge funds suffered their worst first-half performance in almost two decades, according to Hedge Fund Research Inc.
"When things are bad, particularly like they are now, we seem to be a good scapegoat for absolutely everything," Mr. Shoval said. "That’s what’s neat about the whole hedge fund manager routine that I’m doing, because there are so many misunderstandings."
West Palm Beach (HedgeCo.Net)- Hedge funds have grown from as few as 300 funds in 1990 to more than 10,000 today. However, there has been a recent drop in new fund launches due to the recent credit crunch, closures and bankruptcy have dislodged talented managers who are now looking to start up investment pools of thier own.
Hedge fund hotels are playing an important role in the process of new hedge fund formation, giving talented yet little known managers a place to start from, while both minimizing costs and distractions to the investment process.
Companies such as HedgeCo LLC, a NY-West Palm Beach hedge fund service provider, has opened a hedge fund hotel in midtown Manhattan offering tenants a ‘plug and play’ solution, and features such as windowed offices, private workstations and team rooms.
"No other firm offers office space with as many benefits." Evan Rapoport, Co-Founder of HedgeCo, said, "We are pleased to be in the position to offer these servicies at this important time of growth in the hedge fund industry."
Following in the trend, KnowledgeSuites has opened a hedge fund hotel in Toronto and Eurekahedge in Singapore, there have also been stories of hedge fund hotels springing up in the Hamptons, as well as more in the Cayman Islands.
Hedge fund hotels typicaly come pre-furnished, with receptionist, conference room with plasma, copy machines, kitchen, bloomberg terminal, access to capital introduction events, conference passes and discounts on various hedge fund services, as is the case with HedgeCo’s Manhattan opening.
"Hedge fund hotels simply add incremental liquidity and opportunity into the investment landscape." Roger Ehrenberg of Information arbritage says, "If a manager can’t cut it, they fail and go home. If they do make it, however, riches are bestowed upon them…especially if the firm has the ability to seed top prospects and reserve future capacity."
